TNAG-0868-FCO40-1078-Air-services-between-China--Hong-Kong-and-the-UK-1979 — Page 19

with

CONFIDENTIAL

FM PEKING 1902102 JUL 79

TO IMMEDIATE FCO

TELEGRAM NUMBER 657 OF 19 JULY 79

MEDIATE HONG KONG

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Morlan 219.7

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HKK184/2 MR MARRAN "Horytim

Miss BROWN

INFO

DESKBY FCO 19099AZ.

DESK BY HONG KONG 197430Z

IND

FOLLOWING FROM DELEGATION

19 JUL 197

MAGA

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Но Нахад

210MY TELNO 645: UK/PRC AIR SERVICES NEGOTIATIONS

ADVANCE COPY

1. THE TETE A TETE ON 18 JULY STARTED OFF IN A LOW KEY, WITH ROGERS HANDING OVER THE LATEST VERSION OF THE ROUTE SCHEDULE WHICH IS NOW (BARRING SURPRISES) AGREED BY 30TH SIDES.

2.

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[FILES]

ARISING FROM ROGERS' FOLLOW-UP OF SOME COMMENTS LU HAD MADE ON A PREVIOUS OCCASION, LU EXPRESSED HIS WILLINGNESS TO EXPAND THE SHORT PARAGRAPH ABOUT CHARTERS WHICH HAS BEEN CARRIED FORWARD FROM THE 1973 AGREEMENT TO PROVIDE FOR RECIPROCITY IN THE GRANTING OF CHARTER PERMITS. THIS, IF CONFIRMED, WOULD ACHIEVE AN IMPORTANT OBJECTIVE IN THE HONG KONG CONTEXT.

30

HOWEVER, WHEN ROGERS PRODUCED A DRAFT TEXT ON THE LINES

HE SAID

·OF PARA 1 OF YOUR TEL 0 399 LU DROPPED A 30MBSHELL.

THAT NOT ONLY WAS HE UNWILLING TO ACCEPT ON THE REGIONAL ROUTES A SUBSIDIARY OF AN AIRLINE WHICH WAS OPERATING THE ROUTE BETWEEN LONDON AND HONG KONG BUT ALSO THE REGIONAL ROUTES SHOULD BE OPERATED BY A LOCAL CARRIER FORMED SPECIALLY FOR THE PURPOSE TO OPERATE THESE SERVICES ONLY**.

4.

ROGERS EXPOSTUALTED THAT AFTER TWO MONTHS OF NEGOTIATIONS

DURING THE PAST TWO LU WAS NOV RAISING A MAJOR NEW POINT.

ONTHS HE HAD SPENT MANY HOURS NEGOTIATING WITH LU, BUT NEITHER IN THE PLENARY SESSIONS NOR IN THE COURSE OF THEIR INFORMAL DISCUSSIONS HAD LU EVER GIVEN THE SLIGHTEST 1LING THAT THE CHINESE WERE INTENT ON HAVING THE REGIONAL ROUTES OPERATED BY A CARRIER WHICH DID NOT OPERATE ELSEWHERE. ON THE CONTRARY, THEY HAD ACQUIESCED IN THE ATTENDANCE OF A CPA REPRESENTATIVE THROUGHOUT THE NEGOTIATIONS AND ROGERS HAD MADE IT PLAIN ON SEVERAL OCCASIONS THAT WHILE THE DECISION AS TO WHICH AIRLINE SHOULD BE DESIGNATED FOR THE REGIONAL ROUTES HAD NOT YET BEEN

MOREOVER,' TAKEN, CATHAY PACIFIC WERE CERTAINLY IN THE RUNNING. BLUCY HAD BEEN INVITED TO PEING SHORTLY BEFORE THE TEAMS ARRIVAL AND HAD BEEN GIVEN TO UNDERSTAND THAT THE CHINESE WOULD